Stone Energy — Merger or Acquisition (December 2017)
16 slides from Stone Energy's merger presentation, Dec 7, 2017
Slide 1: Capital One Securities, New Orleans, December 2017
VK 989 - Pompano December 2017 Capital One Securities New Orleans, LA. Filed by Stone Energy Corporation Pursuant to Rule 425 under the Securities Act of 1933, as amended, And deemed filed pursuant to Rule 14a-12 Under the Securities Exchange Act of 1934, as amended Subject Companies: Stone Energy C
Slide 2: Forward-looking statements
This presentation and the oral statements made in connection therewith may contain “forward looking statements” within the meaning of securities laws. Any forward looking statements involve risks, uncertainties and assumptions. Although we believe that the assumptions and analysis underlying these s
Slide 3: Cautionary Statements
Cautionary Statements In connection with the proposed transaction, Sailfish Energy Holdings Corporation, a subsidiary of Stone that will be renamed Talos Energy, Inc. as of the closing of the proposed transaction (“Newco”), will file with the SEC a registration statement on Form S-4 that will includ
Slide 4: Company Overview Summary and Current Capitalization
Company Overview Summary Current Capitalization Pure play Gulf of Mexico operator focused on the Deepwater High quality production base with low-risk development upside Strong balance sheet and liquidity position 3Q Production 19 MBoepd ~77% Oil / NGL ($ in Millions) Share Price (12/1/17) $26.54 Sha
Slide 5: Pompano / Cardona Fields & Offset Opportunities
Pompano / Cardona Fields & Offset Opportunities Rampart Derbio MC72 Derbio MC27 MC28 MC29 MC71 VK989 VK990 Cardona MC117 MC113 Pompano Field Rampart Mt. Providence 100% owned infrastructure in ~1,300’ of water Current Field Production of 11.5 Net MBoe/d 2017E LOE & PHA ($/Boe): $4.29 Significant pla
Slide 6: Expenses and Capex Reduced
Expenses and Capex Reduced 2013 2014 2015 2016 Est. 2017 $MM $100 $111 $107 SG&A* $94 $55 * 2016 includes higher legal fees, severance, retention, cash in lieu of stock based incentives 380 employees $MM $695 $900 $470 Capital $208 $181 Board Approved $181 MM Capital Program App 1% GoM Lease Operati
Slide 7: Combination of Talos Energy and Stone Energy November 2017
Combination of Talos Energy and Stone Energy November 2017
Slide 8: Transaction Terms
Transaction Terms 100% stock transaction 34.16 MM shares issued to Talos (20.06 MM Stone shares, 54.22 MM total shares) Combined company initial Equity Value of ~$1,900 MM (1) Combined company initial Enterprise Value of ~$2,500 MM (1) Stone’s 2nd Lien Notes will be exchanged into Talos’s 2nd Lien N
Slide 9: Talos Pro Forma Overview
Talos Pro Forma Overview Strip Proved Reserves (1) 135 MMBoe Strip 2P Reserves (1) 172 MMBoe Strip Proved PV-10 (2) $2,277 MM Strip 2P PV-10 (2) $2,976 MM 2017E Production 47 MBoe/d Pro Forma 2017E EBITDA (3) $440 MM Net Debt / PF 2017E EBITDA (3)(4) 1.4x PUD PDP PROB PDNP Strip Proved Reserves Stri
Slide 10: Talos and Stone are Stronger Together
Talos and Stone are Stronger Together Talos High quality production base with shallow decline curve and low-risk development Concentrated asset base with operatorship of key assets Pompano has infrastructure in place, reduced capital intensity for new drilling (key hub) Key producing asset in covete
Slide 11: Pro Forma Capital Structure and Liquidity
Pro Forma Capital Structure and Liquidity Stone to issue 34.2 MM shares to Talos for 63% Talos pro forma ownership Based on Stone’s equity value of ~$700 MM, creates a pro forma combined Equity Value of ~$1,900 MM and Enterprise Value of ~$2,500 MM Pro Forma borrowing base expected to be $600 MM wit
Slide 12: Benefits of Combined Business
Benefits of Combined Business Production – More aggressive exploitation of PDNP, Tornado, and Pompano development due to less concentration risk and more redundancy Expenses – Shore base duplication, transportation duplication, G&A duplication, “right-sizing” services and personnel, and consolidatin
Slide 13: Phoenix Complex – Typhoon, Boris and Tornado Fields
Since Talos acquired the Phoenix field, the company has materially grown reserves in the asset by >100% Name plate capacity on the HP-1 Floating Production Unit is 45k BOPD New seismic and reprocessing led to an inventory of development and exploration wells Five new subsea wells drilled to date, tw
Slide 14: Mexico Block Zama Discovery Overview
Mexico Block 7 Zama Discovery Overview Source: Premier Oil and Wood Mackenzie. Zama Pre-drill Volume Range Offshore Oil Discoveries with Recoverable Resource >300 MMBoe Since 2012 Key Notes full stack reprocessed seismic data in depth Flat Spot Likely indicates oil/water contact Zama-1 Well Zama-1 W
Slide 15: Well Positioned Relative to Offshore Peers and Onshore Basins
Oil (% of Strip Proved Reserves) All-in 3 Year F&D ($/Boe) (2) 2017E EBITDA Margins ($/Boe) (1) ü ü ü Net Debt / 2017E EBITDA (1)(3) ü Talos Pro Forma vs. Offshore Peers 2017E EBITDA Margins ($/Boe) (1) Oil (% of Strip Proved Reserves) All-in 3 Year F&D ($/Boe) (2) Net Debt / 2017E EBITDA (1)(3) ü ü
Slide 16: High quality, diversified GOM exposure
High quality, diversified GOM exposure led by Talos’s team with peer-leading F&D costs(1) and Stone’s proven operating track record Control through > 84% operatorship of production, development and exploration Significant oil exposure (~70% of Strip Proved Reserves) Strong Pro Forma Balance Sheet Le